“If it ain’t broke, break it.” That seems to be the mantra of the Christie administration when it comes to the running of the New Jersey State Lottery.
Today, the Assembly Budget Committee convened to discuss the administration’s plan to wrest the sales and marketing for the lottery from state workers and give those functions to a consortium of three for-profit companies, one of which is American, and none of which are located in New Jersey. The three firms submitted the only bid in response to the RFP. As Seth Hahn of CWA remarked in his testimony,
One has to wonder if there was any competition at all, or if the … companies planned from the outset to come together to stop competition. Other questions arise about whether this is competition or collusion.
These same companies are in a partnership to run the Illinois lottery, and the performance of that consortium has been unblemished by success, with multi-million dollar lawsuits flying around, and the citizens of the Land of Lincoln suffering from revenue shortfalls from that lottery. Back here in New Jersey, in the late 1990’s a young prosecutor named Kim Guadagno prosecuted a principal in one of the bidding companies for money laundering and political kickbacks. How times have changed!
It’s not that the New Jersey lottery is underperforming. According to Hahn, a report from an independent entity showed that sales have increased in the last decade, we are fifth in the nation in per capita sales, and gross margins are at the top of the list, “making New Jersey’s lottery the most efficient lottery in the country.”
The Assembly panel heard only one side of the story. State Treasurer Andrew Sidamon-Eristoff and Lottery Executive Director Carole Hedinger refused to testify. Their claim that it would be inappropriate during the negotiations with the private entity is a red herring since they could certainly keep the legislature informed in a closed session or answer questions not directly related to the negotiations.
Of course, it’s no surprise that Governor Christie eschews transparency and does not treat the legislature as a co-equal branch of government. This is ARC Tunnel déjà vu.
The bill requiring legislative approval for privatization of the lottery passed in the Budget Committee on party lines. If it passes in the full Assembly and then in the Senate, I’m sure Governor Christie will veto it faster than you can scratch off the numbers on a lottery card.
The lottery is one of only two of fourteen major revenue streams that is meeting their numbers this fiscal year. But the administration’s actions and lack of transparency put that in jeopardy. The legislature should put the brakes on this initiative until all the facts are known.